LoveFilm to stream Disney titles while rival Netflix announces 'multi-year' deal to show DreamWorks animations 

• LoveFilm to show 'growing list' of classic and modern Disney titles
• Netflix will show exclusive DreamWorks content from next year

By Daily Mail Reporter and Steve Nolan

Published: 22:56 EDT, 17 June 2013 | Updated: 03:06 EDT, 18 June 2013

LoveFilm has agreed a deal with Disney that will see users of its online movie streaming service able to watch some of the studio's best-loved classics.

All-time family favourites such as Dumbo and The Lady And The Tramp will be available to viewers alongside modern day Disney productions such as Wall-E and Ratatouille.

The Amazon-owned service said that more Disney titles are likely to be added to the LoveFilm selection list.

Simon Morris, Chief Marketing Officer at LoveFilm, said: 'Disney is renowned for creating world famous, quality family entertainment that parents can trust; from the earliest animations to modern classics.

'We are thrilled to enhance our relationship with the launch of Disney movies on demand, and even more excited about bringing our members so much new content in the process.'

LoveFilm announced the deal with Disney as rivals Netflix revealed that it had signed its own contract that will see its service offer new shows from DreamWorks Animation from 2014.

Though financial details were not disclosed, Netflix said the agreement includes more than 300 hours of new TV episodes in a multi-year deal. Analysts estimated the contract could be worth several hundred million dollars over time.

The transaction is a major coup for both the video streaming company and the movie studio that  produces the new content.

It helps Netflix compete with pay TV channels such as HBO and Showtime, and it gives DreamWorks a potentially lucrative outlet for its shows as it tries to shed its reliance on two or three big-budget movies each year.

'This is arguably a groundbreaking deal,' said Tuna Amobi, a Standard & Poor's equity analyst who covers both Netflix and DreamWorks Animation SKG Inc.

While concerns remain about how much the deal will cost Netflix in the end, the company said it can debut the original series in the 40 countries where Netflix operates.

That could help spread the costs over more territories and more subscribers if Netflix continues to grow overseas.

'The big question is if this is going to be an international catalyst in terms of subscriber growth,' Amobi said.

Investors hailed the deal as a win-win. Netflix shares rose $15.24, or 7.1 per cent, to close at $229.23 on Monday, while DreamWorks shares rose 93 cents, or 4 per cent, to close at $23.74.

Netflix is doubling down on original children's programming, hoping to strengthen its push to become a family entertainment brand.

The new content should ease some of the pain of losing a range of kids shows from Viacom Inc.'s Nickelodeon network, including future episodes of 'Dora the Explorer,' which Amazon.com Inc. snapped up for its streaming service in early June.

The deal suggests DreamWorks will significantly ramp up its production of TV shows.

Currently, it only produces 'Dragons: Riders of Berk' for Cartoon Network, which completed a run of 20 episodes at 23 minutes each - less than 8 hours of content in all - in March.

A second season of 'Dragons' is set for release in the fall, and Netflix had already contracted with DreamWorks for a series based on its upcoming film, 'Turbo.'

But the deal suggests that several new series will have to debut each year to fulfill the industry standard deal length of five to seven years.

New series will be based on characters either from future film hits, past franchises like 'Shrek,' or Сериалы онлайн lostfilm even older hits, including the hundreds of characters like 'Casper the Friendly Ghost,' which DreamWorks acquired when it bought Classic Media last July for $155 million.

The multi-year agreement tops the undisclosed amount Netflix spent on 'House of Cards,' the political drama starring Kevin Spacey that debuted to rave reviews on Netflix in February.

Netflix has been adding original programming to its roster of older movies and TV show reruns, and is set to launch the Jenji Kohan-created 'Orange Is the New Black' next month.

The company has said that for the next several years, it will contain original content spending to within 10 per cent of its $2billion in annual content costs.

Netflix's increased focus on children's programming is seen as a departure from the tactics of traditional premium pay TV channels such as HBO, Starz and Showtime, whose original shows tend to be tailored to adults.

It also ramps up the competition for children viewers with Amazon, which said last month it will produce three new original kids shows for members of its Amazon Prime subscription plan.

Netflix has said it has 29.2 million streaming video subscribers in the U.S. and 7.1 million internationally as of the end of March. Those figures are up 5.8 million and 4.1 million respectively from a year ago.

In December, Netflix announced it will offer Disney movies, starting with films released in 2016. It declined to make a similar deal for the rights to Sony movies starting in 2016, which was kept by Starz.

Netflix has gradually been shifting where it spends money - preferring exclusive and original content over shows that appear elsewhere, as was the case with content from Starz and Viacom. It let both of those deals lapse.

The company studies the viewing habits of its subscribers to gather insights into whether the programming is likely to be a hit on its service, and how much to pay for it. But not all of its picks have been winners.

After 'Arrested Development' debuted last month, Netflix's shares dropped more than 6 per cent because critics had mixed reviews. Monday's gains more than made up the lost ground.